Most firms seem to exhibit constant returns to scale after some level of output.

Question

Quizplus · Accepted Answer

This statement is generally true. Constant returns to scale means that if all inputs are increased by the same proportion, output also increases by that proportion. However, there may be cases where a firm initially experiences increasing returns to scale due to economies of scale, or decreasing returns to scale due to diseconomies of scale.

Most Firms Seem to Exhibit Constant Returns to Scale After